NPS in Germany - The right method to measure customer satisfaction?

March 5th at 4:42pm by Paul Schwarzenholz

How is your organization regarded by your customers? Do they love you? The Net Promoter Score (NPS) will help you find out. In other European countries, and especially the USA, the NPS system is held in very high regard. But how about the NPS system in Germany - is it a red-haired stepchild or a justified method of measuring customer satisfaction?

The Net Promoter Score in Germany is becoming an important key metric to judge an organization's success, offering a simple method to monitor customer satisfaction. At the international level though, there are immense differences how critical customers award their scores. Companies are therefore well-advised to deal only with results from their own country and not to compare themselves with NPS scores from abroad.

Contents:

  • NPS Systems: How Germans judge things
  • NPS in Germany : Land of the critic?
    • Cross border comparisons as a challenge for the NPS system
    • NPS: Industry and country dependent
  • The acceptance of the Net Promoter Score in Germany
    • Values to shout about
  • Pros and cons of Net Promoter Scores in Germany - an overview
  • Summary: NPS in Germany - trending, but room for improvement

NPS Systems: How Germans judge things

The Net Promoter Score in Germany is strongly related to the industry being rated. Depending on which company from which area sets the NPS survey and which target group is asked will greatly affect the relative positive or negative score.

According to a study of 1,000 respondents conducted by defacto research & consulting GmbH and the University of Bamberg, Amazon, with an NPS score of 23 placed first with a significant lead over several industries. It was unimportant if the respondent had purchased from the retailer or not. When taking only the score of those who had shopped there into account, the NPS score rose to 43.

In the fashion industry, Hugo Boss topped the ranking with an NPS score of 21. Mercedes Benz had almost double as much, 40 points, taking the top spot in the car industry.

Banks, on the other hand, enjoy relatively little trust in Germany and slide therefore into the minus zone. The best scorer here was Deutsche Bank with a total of minus 8.

NPS in Germany : Land of the critic?

When looking at the average Net Promoter Score across countries, it is evident that Germans are tendentially critical.

Values in the USA, for example are much higher: Tesla, according to npsbenchmarks.com, has a score of 97, Apple 89. These are the kind of scores that companies here in Germany can only dream of.

What’s the cause of this? Does it really stem from a negative attitude towards products and companies, or do cultural differences also play a role?

Cross border comparisons as a challenge for the NPS system

The Net Promoter Index originally came from the USA and established itself there as a basic business and marketing metric. So far the relationship between Net Promoter Score and business growth has only been researched in the USA and Great Britain. On top of this, studies have shown that the same ranking scale has a different meaning for customers in different countries.

Whilst a US consumer commonly expresses their satisfaction with a rating of 9, many Chinese achieve the same with a rating of 8, Malaysians only 7. There the best ratings of 8 to 10 are hardly ever awarded.

Poland and Norway also tend towards negative judgements: they almost never award the values of 9 and 10 in a survey, whereas in Russia almost 20 percent of respondents show their satisfaction with the highest values.

Germany reveals itself to be critical to neutral, without being aware of it. The question of recommending the good or service to a friend is most commonly answered with 7 or 8. According to the official NPS-Barometer, that is a “passive purchasing style”. The customer, however, believes they have given a good grade.

German customers, do not therefore have a poor opinion towards companies and products. They simply express their agreement on the NPS scale lower down than the average American.

NPS: Industry and country dependent

A sensible comparison of an NPS score within an industry or company overseas is not possible. The value is useful in the country it was generated in, and only for the specific branch or product that was surveyed.

Additionally, a wide-reaching knowledge about the differing cultural backgrounds for each response is necessary in order to effectively rate the score. A value which would be regarded as passive in the US, shows high satisfaction in Germany.

The acceptance of the Net Promoter Score in Germany

How accepted is the Net Promoter Score in Germany in comparison to other countries - and how should a company use this?

In the Anglo-Saxon world, NPS is a valid indicator for the popularity and ultimately the success of a company or product. But even in Germany the NPS has found its place in the Marketing Mix, even though not all consumers know what the expression means.

In German companies the NPS is increasingly popular, as the method allows one to gather information about customer loyalty in the easiest way - and the results are especially interesting when the additional question “What is the main reason for the rating that you just gave?” is asked.

This allows one to get closer to the reason for each comment and find a method to improve customer satisfaction. A single NPS score allows you to get a snapshot for a momentary comparison with your industry competitors, but it does nothing to help you calculate a positive or negative development. Only when you have survey information from a longer period can you draw conclusions as to how your company is developing.

Values to shout about

German consumers only find out through laborious research the NPS scores of companies here. In contrast, in the USA companies make a song and dance about it. It is used in advertising material and has ensured that NPS remains a common metric for measuring customer satisfaction. Its meaning is now so relevant that in some industries the publication of your score is required to be listed as a supplier.

How benchmarking with the NPS-System functions works is explained in our article Net Promoter Score - Benchmarking.

Pros and cons of Net Promoter Scores in Germany - an overview

The NPS score is certainly of interest to German companies. However, there are also disadvantages.

Advantages

  • Quick and easy collation of a country and industry specific indicator
  • Early indicator for regional business development
  • Publishing your NPS score can increase customer trust

Disadvantages/Challenges

  • Not yet recognised by customers in Germany as in the USA
  • Wide-ranging knowledge of the background to each rating necessary
  • On the international level difficult to compare even in the same company or industry

Summary: NPS in Germany - trending, but room for improvement

It remains to be seen when and if NPS will ever become such a key metric as it is in the USA. To get there, there needs to be more openness surrounding the scores obtained and measuring methods more tailored to the typical cautious German response to these types of surveys.


Paul Schwarzenholz

Founder & Managing Director zenloop